More Money Comes In, But Still No Budget Deal

by Paul Hogarth on July 1, 2010

I stayed at City Hall until 11:30 p.m. last night, but Mayor Gavin Newsom still hadn’t agreed to a budget deal with the Board of Supervisors Budget Committee. Even though the City just received another $5.2 million yesterday in real estate transfer tax revenue – thanks to the sale of more downtown office buildings. This piece of good news gives the Supervisors an extra $13 million in revenue we didn’t know about before – helping to balance the budget by avoiding social service cuts, and improving what was already a better fiscal picture than last year. One would think this would make a budget compromise everyone can agree on more feasible – but the Mayor wouldn’t budge as the hours ticked on. Maybe he was focused on the June 30th fundraising deadline for his Lieutenant Governor’s race.

The Budget Committee met at 2:00 p.m. yesterday, and the mood was upbeat. Controller Ben Rosenfield issued a memo that the City just reaped another $5.2 million – adding our total transfer tax revenue for June to $20 million. This puts us $13 million ahead of our expected revenue projections. We can thank passage of the 2008 ballot measure that raised the transfer tax for making yesterday’s news possible. The effect is that it kills the Mayor’s mass condo-conversion proposal, and helps the Board avoid privatizing City services.

At yesterday’s meeting, the Supervisors disposed of most of the “Prop J” contracting measures – such as security guards at SF General Hospital, processed food at Juvenile Hall, body removal services, and security guards at the Asian Art Museum. Moreover, the Controller has identified ways to make $2 million in savings to the hospital security guards without contracting out. And SEIU is in negotiations to make similar savings in Jail Health Services, in order to avoid privatization of such critical health services.

While the exact amount of “add-backs” – budget cuts restorations – remain in flux, the City is in better financial shape than it was last year, meaning that any negotiations between the Mayor and the Supervisors should be smoother. But unlike last year, where talks were over by 7:30 p.m., the Budget Committee was still waiting for a deal with the Mayor. The Committee was scheduled to reconvene at 5:00 p.m., but that never happened.

As we all huddled in the hallway – watching the Supervisors go back and forth in their offices – I received an e-mail from Gavin Newsom’s Lieutenant Governor campaign. June 30 may be “add-back day,” the last day of the City’s fiscal year, but it’s also the fundraising deadline for candidates running for statewide office. In his fundraising pitch, Newsom touted his leadership in San Francisco as a rationale for his candidacy:

It’s easy to rely on campaign rhetoric or make hollow promises. Rather, I want to emphasize what we’ve actually accomplished in San Francisco and how I’ll bring both ideas and the ability to implement them to Sacramento.

Instead of just talking about the precarious state of our health care, we got something done: universal health care for all San Francisco residents. No other city in America has achieved this. Instead of takeovers, we worked collaboratively with our school district to improve performance. Instead of hand-wringing over job losses, we actively brought growth industries like greentech to San Francisco and expanded job training.

It’s fine for Newsom to campaign for statewide office, but he undermines his arguments when he fails to work with the Supervisors to pass a budget on time.

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